personally, i'm a coca-cola fan, but... they're suffering from their own arrogance and short-sighted-ness.

they FINALLY turned things around (hopefully) with coke zero and vault (maybe) and dasani flavored waters. but they should probably branch out a bit more... i mean, they're sitting on billions of dollars of CASH.

they should start by buying red bull.

fusion

01-13-2006, 07:51 PM

Pepsi hasn't won the cola war. Their focus now is on Diet Pepsi, not Pepsi. Maybe they're trying to win the diet cola war?

I always thought Coke should buy a chip company. Pepsi does a TON of co-marketing with Frito and Pepsi products - lots of themed displays, ads, etc. Especially during the Super Bowl.

The trouble is, there is no other nationwide chip company. But since I live in the backyard of the snack capital of the country (Pennsylvania), I personally vote for Utz chips.

http://www.utzsnacks.com/

They are located in Hanover PA, and their products are currently distributed from Maine to North Carolina. Coke could rent excess warehouse space from the bottlers to distribute in the rest of the country.

The other option would be Snyder's of Hanover. They are also located in Hanover, but they have a second bakery in Goodyear, Arizona. Their products are delivered all over the world, though I think most of it outside their core area is drop shipped pallets.

http://www.snydersofhanover.com/

Their main focus is pretzels, and they also have a line of healthier snacks. Their chips are much harder to find (but pretty damn good). They also make Hershey's chocolate covered pretzels.. mmmm.

Mr Zabe

01-13-2006, 07:59 PM

No to be a smart arse, I would doubt Coca Cola would consider acquiring a snack food company. Just seems to make too much sense. :rolleyes:

I agree Coke should get in the salty snack food business for marketing and soda pop volume increases.

[ 01-13-2006, 07:59 PM: Message edited by: Mr Zabe ]

popologist

01-13-2006, 08:17 PM

coke was rumored to be eye-ing "eagle snacks" back in the 80s/90s... but then decided to pass.

also, i know that healthy snacks are the trend but... maybe coke should do the opposite... and stick with what it knows best... junk food. maybe buy a candy company. or hostess cupcakes. something like that. things that kids pack in their lunches.

i guess the danger with that is being demonized by the media. they've already gone after soda in the schools.

popologist

01-13-2006, 08:21 PM

Originally posted by fusion:
Pepsi hasn't won the cola war. Their focus now is on Diet Pepsi, not Pepsi. Maybe they're trying to win the diet cola war? diet coke will pass pepsi way before diet pepsi passes diet coke.

in 2004, pepsi had an 12% share... and diet coke had 10%... and diet coke has been gaining steadily for years. diet pepsi only sells about half as much as diet coke.

many analysts have been predicting that diet coke would pass pepsi as the #2 soft drink in the next ten years. but, now, with coke zero taking a bite out of diet coke's sales, that might not happen.

for the latest data (2004) for market share, go to beveragedigest.com

popologist

01-13-2006, 08:24 PM

by the way, pepsi-cola does NOT sell more than coca-cola. not in the US. not internationally.

this thread was originally about market capitalization.

SamC

01-13-2006, 09:48 PM

Its apples to oranges.

KO is a soft drink company. It has a, by Wall Street standards, tiny juice division (Minute Maid) and that is it.

PEP is a salty snack company. It also has divisions that make soft drinks, sports beverages, juice products, and cereal.

KO, if it were in a race to be "bigger than PEP" could easily merge with a foods companry (Smuckers, Sara Lea, or Kellogs would be a good fit), a candy company (Hershey or Wrigley would work), a hard drink company like Diaego or SABMiller or buy another product line. Or it could sell itself to a big major like Kraft General Foods or ADM.

It is not in such a competition. Just happy to DOMINATE for over a century the market segment it is in.

billygtexas

01-13-2006, 11:40 PM

Frito-Lay's chips are so ingrained into the American eating conscience that Coke or any other big company with better products, a huge promotion budget, and superior distribution could never knock them out of first place. I think Eagle Snacks failed because they cloned all of Frito-Lay's products instead of introducing anything new and different that would make them stand out. The only other nationwide company that has competed successfully against Frito-Lay is Procter & Gamble's Pringles brand.

I remember seeing UTZ Chips here in Texas. Maybe at EZ-Mart, Family Dollar, Dollar General or Dollar Tree had them for a dolalr. I have no clue they wound up down here! Our local Dollar Tree has had Uncle Ray's, Cabana, Herr's and Bon Ton potato chips. The Bon Ton's were a nice surprise for a dollar, nothing innovative but they were crisp and tasty. (PS I never buy the Fritos/Dorito's knockoffs - they are always inferior)

Jay's are still a regional snack company.
I'm spoiled as I can get Jay's when ever I want them as they are made in Chicago. My all time favorite is the original BBQ Potato Chips made with the best paprika this side of the ocean washed down with an ice cold Coke or Pepsi. smile.gif

http://www.taquitos.net/dbimages13/Jays-BBQ.jpg

[ 01-15-2006, 09:08 PM: Message edited by: Mr Zabe ]

popologist

01-14-2006, 11:16 AM

Originally posted by SamC:
Its apples to oranges.

KO is a soft drink company.

PEP is a salty snack company.

KO, if it were in a race to be "bigger than PEP" could easily merge with a foods companry (Smuckers, Sara Lea, or Kellogs would be a good fit), a candy company (Hershey or Wrigley would work), a hard drink company like Diaego or SABMiller or buy another product line. Or it could sell itself to a big major like Kraft General Foods or ADM.

It is not in such a competition. Just happy to DOMINATE for over a century the market segment it is in. that's all true, but... that isn't what the headlines will say. they'll say "pepsi tops coke" and everyone will think... "oh. pepsi won the cola wars."

but i agree with you.

and... in spite of all of it's bungling, coke... somehow... managed to win the real cola war.

DMC

01-14-2006, 12:15 PM

why should coca-cola purchase a chip company?? they're a SODA company. it's pretty sad when a soda company owns Frito-Lay and Quaker Foods, yet they still can't topple the #1 soda company after all these years.

Pepsi won't admit it, but they make they're money because of Frito-Lay.

popologist

01-14-2006, 01:43 PM

Originally posted by DMC:
why should coca-cola purchase a chip company?? they're a SODA company. it's pretty sad when a soda company owns Frito-Lay and Quaker Foods, yet they still can't topple the #1 soda company after all these years.

Pepsi won't admit it, but they make they're money because of Frito-Lay. well... that IS true. coke sells a lot more soda, but... to stock holders... that isn't really the issue. ;)

i DO believe, however, that coke still has higher profits... overall, and as a percentage as well. but i'll check on that.

still... coke needs to be concerned because... as the article states... with pepsi having such popular "snacks" gives them more leverage in the supermarkets... where most soda is purchased. they can get more shelf space... or give out special coupons linking doritos to pepsi, etc.

not everyone is as loyal to their sodas as some of us.

[ 01-14-2006, 01:45 PM: Message edited by: popologist ]

Android

01-14-2006, 05:55 PM

I'll make the following notes

- I agree, apples and oranges to compare the two companies that way. However it's also an unfair comparison to pit Brand Coke against Brand Pepsi as far as overall sales in the US. That is because of the sizable lead that Coke enjoys in exclusive fountain sales. That is, where people have no choice but to buy Coke and Coke products.

I don't know if this still is the case, but starting in the mid/late 70's, if you compared brand Pepsi against brand Coke in "head to head" sales - grocery and other competitive outlets, Pepsi usually outsells Coke. And as far as overseas sales, Coke always has had a large advantage over Pepsi in international markets - Coke got their first, heck the US Armed forces helped build Coke's initial international infrastructure during World War 2.

- As mentioned, Pepsi's combination with Frito-Lay was a very good synergy of two companies - one to make you thirsty one to satisty that thirst. A direction that Coke didn't care to try to match I guess.

- Okay, this is regarding the OFF-TOPIC potato chip discussion, directed mostly towards Mr Zabe - about Potato Chips in Illinois. I grew up in Rockford, and my parents often bought Jays. They are OK, not a whole lot different than Lays to me though. However a local brand in Rockford is Ms. Fischers, that was "da bomb" as far as chips go when we were growing up, very good chips. Another brand that tasted about the same came and went in the Rockford area in the 80's and 90s, that was called Mr. G's I believe. And the best of all, is another Central Illinois potato chip - Kitchen Cooked. Don't think those are sold in the Chicago area though. But when I used to go to Davenport to get AD Heusing Pepsi, I was ALSO buying large amounts of those chips. I think they've rated at/near the top of a few national potato chip comparison polls over the years as well. I can and have eaten an entire large size of their chips at one setting before.

Which brings me back to Jays. Jays "Old Fashioned Kettle Cooked" chips taste much the same as those Kitchen Cooked ones.

http://www.jaysfoods.com/images/productimages/kettledcooked.gif

Recently I was at a local Big Lots and saw some Jays products, including:

http://members.trainorders.com/android/images/Jays.jpg

I had to buy some, hoping they might be the first product only renamed. They weren't. They tasted like most of the other kettle-cooked chips you find in this region, including the Lays, Nothing like those aforementioned Illinois products. *sigh*

-Andy

[ 01-14-2006, 05:56 PM: Message edited by: Android ]

Mr Zabe

01-14-2006, 06:30 PM

***Off Topic***
Andy, your killing me. LOL I have not been able to eat potato chips for almost 3 years. Just chatting about them has driven me to the brink of a late night road trip to the local 7-11. YUM

[ 01-14-2006, 06:31 PM: Message edited by: Mr Zabe ]

SamC

01-14-2006, 08:37 PM

The thing about PEP and its main division, Frito-Lay. PEP totally does no synergy with Frito-Lay to help its soda division.

From the public eye, read a Frito-Lay package. In the US it reads "Frito-Lay - RECOT, INC - Dallas". Not "Pepsico - Purchase, NY". RECOT is a dummy company, an alter-ego of Pepsico. Name another product that is labeled like this. Every other product I can think of has the real corporate info on the package.

To the business side. Talk to any store, vendor operator, or restaurant. Ask them how much of a deal they get between Pepsi and Lays. The answer is none. They are operated as two totally seperate companies. You can sell Lays and Coke and the Lays man won't say a word. You can sell Pepsi and a local chip brand and the Pepsi man won't say a word. No joint marketing.

From this I must conclude that PEP knows what a winner it has in Frito-Lay, and in Gatorade (Quaker is a drag on the company and will be sold off soon) and will not do anything to help Pepsi at either's expense.

[ 01-14-2006, 08:37 PM: Message edited by: SamC ]

mjb1124

01-14-2006, 09:30 PM

Originally posted by fusion:
The trouble is, there is no other nationwide chip company. But since I live in the backyard of the snack capital of the country (Pennsylvania), I personally vote for Utz chips.I second that vote. smile.gif

popologist

01-14-2006, 10:40 PM

Originally posted by Android:
I'll make the following notes

- I agree, apples and oranges to compare the two companies that way. However it's also an unfair comparison to pit Brand Coke against Brand Pepsi as far as overall sales in the US. That is because of the sizable lead that Coke enjoys in exclusive fountain sales. That is, where people have no choice but to buy Coke and Coke products.

I don't know if this still is the case, but starting in the mid/late 70's, if you compared brand Pepsi against brand Coke in "head to head" sales - grocery and other competitive outlets, Pepsi usually outsells Coke.
you're incorrect about supermarket sales. coke still outsells pepsi... even where people have a choice, although... the margin is slightly smaller. and it's even tighter at convenience stores. but coke products still lead.

you're also correct that coke has a substantial lead at restaurants though. pepsi tried to destroy that advantage when they bought several restaurant chains (KFC, taco bell, and pizza hut); however, it back-fired in that other chains saw them as a threat... and dropped their products and switched to coke. as a result, pepsi sold off the restaurants.

fusion

01-14-2006, 11:34 PM

Lots of great posts on this topic!

I saw Jay's chips at Big Lots as well, all the way out here in Maryland.

Living so close to Pennsylvania, I am exposed to a lot of local/regional chip and salty snack companies. Herr's is huge out here - I live maybe 35 minutes from their factory (which gives tours). We also have Utz, Martin's, Snyders of Hanover, Snyders of Berlin (no relation), Gibble's, and a bunch of pretzel companies. For some reason, pretzels are HUGE in southeastern/central PA. I also see Wise, Bachman, and then of course every chain has their generics.

Ohio also seems to be a strong potato chip state. I'll tell you who makes a good chip, that's Mike-Sells of Dayton, Ohio. Still fried in peanut oil!

http://www.mike-sells.com/

and in regards to the whole Recot/dummy name thing, Coke has used the "Delaware Punch Company" a few times on their products. I picked up some KMX blue today from Big Lots, and it's right there on the side. I also believe that Simply Orange doesn't mention Coke or Minute Maid on the label, either.

And whoever mentioned Pringles.. they are NOT chips! They are crisps, basically formed from potato flakes. Yuck.

Mr Zabe

01-14-2006, 11:57 PM

Double yuck on the Pringles. LOL

SplitLevelP

01-15-2006, 04:34 AM

In my store with $2.12 per pepsi two liter and $1.46 per coke 2 liter,money in the mohawk valley and all utica area as it is at 1.46 per two liter a champ has been crowned.As for pepsi products mountain dew is the winner by alot!

drpep

01-15-2006, 08:52 PM

For more info on potato chips check out www.taquitos.net/snacks (http://www.taquitos.net)

[ 01-15-2006, 08:53 PM: Message edited by: drpep ]

Mr Zabe

01-15-2006, 09:14 PM

drpep,
This website is outstanding.
Granted my favorite potato chips were dogged big time.LOL It's way cool to read/research snack foods. This site will help when I see things at the dollar store. Tks

[ 01-15-2006, 09:15 PM: Message edited by: Mr Zabe ]

greg

01-16-2006, 04:21 PM

Originally posted by DMC:
why should coca-cola purchase a chip company?? they're a SODA company. it's pretty sad when a soda company owns Frito-Lay and Quaker Foods, yet they still can't topple the #1 soda company after all these years.

Pepsi won't admit it, but they make they're money because of Frito-Lay. Why should Coke buy a chip company, They're a soda company??? It's called expanding, divesting,growing, market penetration, etc. Why would a snack maker (Nabisco) buy a tobacco company (RJR). It is to increase shareholder value. That is exactly what Pepsico did and it is why they are the market capitalization leader.
Shareholders demand and expect a healthy return on investment. Coke has sat idle while Pepsi has gone out to try to reap more sales and profits.
That is the reason they bought Frito Lay, Pizza Hut, KFC, Taco Bell, and SOBE.
They sold the food chains because they were keeping profits down. It didn't work as they planned. A company like Pepesi will not rest on its laurels and just maintain the staus quo. Sometimes that is the best thing about being #2, you're hungrier than #1.
g

PhillySteve

01-16-2006, 10:30 PM

First, I'll say that Coke is no longer a soda company. They're a beverage company. Soda continues to lose share to bottled water, sports drinks, energy drinks, teas, coffees, etc. etc. Where Pepsi can really claim victory is in most of these categories. Aquafina is the leading bottled water brand and is carried over Dasani in some Coke "exclusive" franchises. They've also made some very successful acquisitions (Gatorade) and licenses (Starbuck's) while Coke has been playing catch up.

ramonazo

01-17-2006, 05:11 PM

Talking about Potato Chips, I love Doritos Cool Ranch, I love it so much that also brought a big bag for home, because sadly that flavor is not available here in Mexico, only in Nachos flavor, Green Sauce, Pizza flavor, etc., but no one of them are delicious than the american Cool Ranch is the best one...

Talking about acquisitions, The Coca-Cola Company had learned that beverages is their best area (carbonated or non-carbonated), and that the acquisitions of other areas different from soft drinks aren't rentable for them, an example is when they acquired Columbia Pictures in 1982, Columbia had few successes in the box office during that time and Coke had to sell it to Sony.

[ 01-17-2006, 05:12 PM: Message edited by: Ramón Coca-Colero ]

ramonazo

01-17-2006, 05:52 PM

Originally posted by greg:
Why would a snack maker (Nabisco) buy a tobacco company (RJR). It is to increase shareholder value. Isn't Phillip Morris (Altria) the owner of Nabisco?

Nabisco has been part of Kraft Foods for a while. Their trucks say Kraft Foods North America, they are carrying lots of Kraft branded/cobranded items, and so on.

ramonazo

01-18-2006, 01:45 AM

Originally posted by popologist:
coke is still king. smile.gif Completely agree with you statement... :D

jmyjunk

01-19-2006, 02:27 PM

Why should Coca Cola be all things to all people.
If it moves away from its core product, soft drinks, then the argument could go, they don't care about there brands beacuse they are more intrested in chips, tacos, and pizza.
Don't forget that Coke owned a piece of Columbia pictures in the 80's.

coke has been trying to catch-up... as far as buying other established beverages (water, etc.) or creating its own brands (which can take longer to win market share).

also, there is a strategic reason for pepsi/coke to branch out. as the article noted... with pepsi owning frito-lay... it gives them more leverage with grocery stores and convenience stores... because they account for more income.

i'm not a pepsi drinker, but... it's smart business.

jmyjunk

01-19-2006, 04:40 PM

Ah, but Pepsi owned what is now Yum! brands. (Taco Bell, Pizza Hut, KFC) and I think they sold all that off. And that was a perfect fit.

Also Anheuser Busch once owned Eagle snacks. Which made pretzels and other snack foods. Perfect fit as well, but they lost money.

Though it sounds like a good idea-Coke and -(insert chip company here)-
I don't think it would work.

Correct me if I am wrong. Coke still has just an edge over Pepsi when it comes to soda sales. Plus global market penetration of Coke is much bigger than Pepsi. So I guess that's why Pepsi has expanded to other avenues of sales.

But I'm just an arm chair analyst. smile.gif

[ 01-19-2006, 04:40 PM: Message edited by: jmyjunk ]

ramonazo

01-19-2006, 04:41 PM

In fact... Pepsi in Mexico don't have good results in soft drink sales, but where is the absolute leader is in the snacks market with Sabritas (the mexican Frito-Lay) who is the number one in the market against another mexican snacks brand called Barcel from Grupo Bimbo, also Pepsi has a significant market share in the candy and cookies market with a candy line named Sonric's and is the owner of a mexican cookie company called Gamesa; and of course Gatorade and Quaker... Pepsi will never defeat Coke, but it has another markets where is the winner...

http://www.marketing-up.com.mx/imgarticulos/nota2216.jpg

[ 01-19-2006, 04:49 PM: Message edited by: Ramón Coca-Colero ]

Mr Zabe

01-19-2006, 04:47 PM

IMO...If coke would do some intense R & D and develop a snack food that was cutting edge/unique in taste and "got to have pzazz". Then it might be a launching foundation to Coke's entry in to the snack food market.

Sadly the chance of this happening is about as great as me growing wings and flying to Florida for the winter. :D

ramonazo

01-19-2006, 05:16 PM

About diversification... here in Mexico some Coca-Cola bottlers have another activities... for example:

FEMSA (http://www.femsa.com), the major Coke bottler in Mexico and Latin America, is also the owner of Cuauhtemoc-Moctezuma, a brewing company that makes famous beer brands like Sol and Tecate, also has a packaging division and is the owner of OXXO convenience stores...

Grupo Tampico (http://www.grupotampico.com.mx), who distributes Coke brands and their own brands in part of Tamaulipas, San Luis Potosi and Veracruz also has activities like packaging, hotels, warehousing, public relation services and also is the owner of the Chrysler-Dodge-Jeep, Mercedes Benz, Mitsubishi and Toyota dealers in Tampico...

Bepensa who distributes Coke brands and their own brands in Yucatan, Quintana Roo and Campeche also has activities like refrigeration equipments, packaging, and is the owner of a Volkswagen dealer in Yucatan.

Fomento Queretano (http://www.gfq.com.mx) who distributes Coke brands and their own brands in Queretaro also has activities like consulting, equipment maintenance, is owner of an hotel, a local convenience store chain named Super Q and also makes a local milk brand in Queretaro.

The few bottlers who only take care of the beverage market is Embotelladoras Arca (http://www.e-arca.com.mx), Grupo Continental (http://www.contal.com) and Corporacion RICA...

[ 01-19-2006, 05:22 PM: Message edited by: Ramón Coca-Colero ]

popologist

01-19-2006, 11:17 PM

coke should buy a cookie or candy company... and just admit to being "the biggest junk food maker in the world!" LOL. ;)

ramonazo

01-20-2006, 12:17 AM

Originally posted by popologist:
coke should buy a cookie or candy company... and just admit to being "the biggest junk food maker in the world!" LOL. ;) Actually Pepsi has the title... sodas, juices, candy, snacks, cookies, sport drinks, cereals... no doubt about it...

Coke is simply the biggest... in the world smile.gif

sirslash

01-24-2006, 04:31 AM

the biggest problem with coke is all the fast food places like Quiznos and subway which potato chips are a major selling product Pepsi will win those contracts... Coke would be better off with some kind of salty food...but fritolay is a monster and doesnt leave many options

mmm. i used to love the little debbie swiss rolls in college. they were like 25 cents for a two pack. smile.gif

anyway... as for coke buying another company. i guess the danger is that snack food companies are under attack right now (by the media and lawyers)... so, does coke want to become a bigger target than it already is?

also, coke has a very high profit margin right now, but... once it buys something else... those margins go down (because snack foods cost more to produce, store, etc... than sugar water). it's one of the downsides pepsi discovered in the 90s... when they were down and coke was up.

still, if coke had to buy someone... i'd like them to buy m&m or hershey. you know... someone on the same level.